Amazon launches a new ad-supported $114 Kindle

Amazon is effectively lowering the price of its low-end Kindle eBook reader today by introducing a new ad-supported $114 model with special offers.

The deals show that Amazon is serious about making the Kindle into a mainstream replacement for paper books and reaching the widest possible audience through promotional deals.

The special offers in the initial weeks of the launch include $10 for $20 Amazon.com gift cards, $1 for an album in the Amazon MP3 music store, and a $100 gift card if you sign up for an Amazon Rewards Visa Card.

Amazon is also introducing AdMash, a free new Kindle app and web site where customers vote for the most attractive sponsored screensavers. The sponsored screensavers generate new revenue for Amazon and help it lower the price of the Kindle.

The company still offers its $139 version of the Kindle and the Kindle with 3G wireless data service for $189. The lowest-priced Kindle with Special Offers is available for pre-order now and will ship in the U.S. on May 3.

“We’re working hard to make sure that anyone who wants a Kindle can afford one,” said Jeff Bezos, Amazon.com founder and chief executive.

The first sponsored screensavers come from Buick, Olay (Procter & Gamble), Visa, and Amazon.com Reward Visa Card (Chase).

The AdMash app takes advantage of the Kindle’s high-contrast, no-glare electronic ink display.