If You Don’t Mind the Ads, Amazon Offers 3G Kindle for $164

Trying hard to stand out from all the e-reader news from the past two days, Amazon says it is cutting the price of its 3G Kindle to $164.

The $25 price difference is being made possible through the introduction of advertising on the platform. The so-called “Kindle 3G with Special Offers” is available starting today and will ship immediately.

Amazon cut the price of its Wi-Fi model to $114 last month by introducing advertising on the platform. In the six weeks that model has been available, it has become the bestselling member of the Kindle family, said Jay Marine, director of Amazon Kindle, in a statement.

As the tablet and e-reader market heats up, price will become a competitive advantage.

However, Marine told us last month that there’s no chance the device can ever be subsidized heavily enough to become free.

Still, it may be able to afford much larger discounts in the future. In a sense, Amazon may actually be building a much broader–and more profitable–deal network, a la Groupon. For example, one of the offers is $10 for a $20 Amazon.com Gift Card.

A revenue stream like that could provide a competitive advantage to Amazon if it launches a rumored Android-based tablet, which is estimated to be available before the holidays.

Today, Barnes & Noble unveiled its new one-button Nook, which costs $139, and yesterday Kobo announced a touch-sensitive e-reader that will cost $130.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik