I kinda wish my Kindle 3(G) would give me deals like that on Amazon gift cards
...
I'm not sure about the $99 price point you guys are suggesting. Yes, it would get rid of the psychological block for consumers, but will the ads alone be enough for Amazon to get back that $40?
Also, I think the $10 for $20 gift card incentive to buy this new kindle is a great strategy for increasing the incentive to buy this ad-Kindle. I also think some of the money earned from the ads will go into subsidizing the gift card costs. PLUS let's say that you spend that gift card on ebooks. A part of that money will go back to Amazon and will in return strengthen their ebook store.
My point is, I'm almost 100% confident that Amazon has people punching in numbers, statistics and such, in order to maximize profits; whether it's from selling more books (because there'll be more kindles) or whether from selling more kindles.
PLUS this strategy will also further strengthen Amazon's market share of ebook readers and ebook store.
In my opinion, it was only a matter of time before Amazon started advertising, and I think they're doing it in a very carefully, calculated way. I also think it's very intelligent on their part :P