Prepare to Pay More if You Don’t Want Ads on Your New Kindle

Amazon rolled out a whole new line of Kindles today that are priced so low, there had to be a hitch.

Well, there is: Amazon is using advertising to subsidize the cost of the hardware.

For example, the Kindle Touch with Special Offers costs only $99, but if you want one without ads it will cost $40 more. The new Kindle, without a touchscreen, costs $109 — that’s $30 more than the attractive $79 pricetag for the ad-subsidized model.

The Kindle Fire goes on pre-order today for a flat $199, so it’s unclear whether it will come with offers or not.

Amazon started experimenting with advertising earlier this year, by discounting the Wi-Fi and 3G versions by $25 to $114 and $139, respectively.

Amazon said earlier this month that both of those are already the bestselling Kindles, and that “customers report that they love the money-saving special offers.”

In addition to its current offers, such as a $20 Amazon gift card for $10, it was also adding AmazonLocal deals to the rotation. The offers are made possible through the Seattle company’s investment in LivingSocial, which is the second-largest player in the daily deals space.

Amazon said it will start adding local offers in New York City first, and then additional cities later this year. Customers are able to purchase the offers without re-entering their credit card information, and will be able to redeem the offer by showing the merchant the voucher on their Kindle screen.

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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