Skip to Content

Roundup: Amazon’s Ad-Supported Kindle

Some analysts wonder why Google didn’t try this first.
April 12, 2011

Amazon’s new ad-supported Kindle, called Kindle with Special Offers, will retail for $114, or $25 less than Amazon’s Wi-Fi only Kindle. The company says:

Special offers and sponsored screensavers display on the Kindle screensaver and on the bottom of the home screen—they don’t interrupt reading.

However, some wonder why the price cut isn’t more generous. Dan Costa writes:

Why $114 and not, say, the market-killing $99? Amazon hinted at reasons in our meeting, but basically it said that Kindle sales have been very price sensitive. Reducing the price to $139 lead to a huge spike in sales. A $25 price cut should be enough to do the same. Plus, I think it needs to save a big announcement for the holiday season. It isn’t likely we will see another Kindle this year—at least not an E Ink-based reader, so a big price cut in the fall would be just the thing to make the Kindle the hot gift this holiday season. Again.

Dan Frommer notes that, though $25 may not seem like much of a discount, it could still take time for Amazon to recover that money:

Will Amazon eventually be able to sell enough ads and deliver enough impressions to make the subsidy more than $25? (About 2,500 impressions per device at $10 per 1,000 impressions. If you see an average 10 ads per day, that’s still 250 days of use at that ad rate before Amazon breaks even on the $25 savings.)

Amazon’s move is particularly interesting since it’s the sort of thing people have been expecting from Google’s Chrome netbook or similar devices. Mobile analyst Chetan Sharma noted:

While Google is focused on Facebook, Amazon is coming in from left flank. Beautiful.

The Kindle was already an example of sponsored connectivity–a trend I’ve previously covered. If it come to include even more sponsorship, that model could become the way of the future, argues Jason Gallagher:

Amazon should be credited for finding a way to slide another source of revenue into the world of the Kindle. The revenue generated from the ads, let alone if anyone actually clicks on them, should more than cover the $25 discount per unit. Plus, Amazon is appealing to the deal hunter in everyone. This practice goes along with the reason why companies like Groupon are so successful; they offer deals that are actually useful (at least once in a while).

The real amazing part is that no other company put this together sooner. If Amazon and the Kindle with Special Offers are successful, there is little doubt other companies with mobile devices could follow suit.

Keep Reading

Most Popular

A Roomba recorded a woman on the toilet. How did screenshots end up on Facebook?

Robot vacuum companies say your images are safe, but a sprawling global supply chain for data from our devices creates risk.

A startup says it’s begun releasing particles into the atmosphere, in an effort to tweak the climate

Make Sunsets is already attempting to earn revenue for geoengineering, a move likely to provoke widespread criticism.

10 Breakthrough Technologies 2023

Every year, we pick the 10 technologies that matter the most right now. We look for advances that will have a big impact on our lives and break down why they matter.

These exclusive satellite images show that Saudi Arabia’s sci-fi megacity is well underway

Weirdly, any recent work on The Line doesn’t show up on Google Maps. But we got the images anyway.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.