Those three words broadly sum up the attitude of the broadcast TV network chiefs regarding the encroachment on their turf by digital media companies, as they conducted their traditional springtime dog and pony shows for advertisers in New York this week.

With Harry Potter fan site and e-bookstore Pottermore.com now using watermarkinginstead of heavyweight DRM on all the Harry Potter e-books, anti-DRM arguments are growing louder. Now the International Digital Publishing Forum (IDPF), the organization that oversees the EPUB e-book format, hopes to create an industry standard for “lightweight content protection” — something “occupying a middle ground between strong DRM and DRM-free.”

The IDPF is taking the first steps toward creating this standard by launching a discovery process — though it acknowledges the outcome of this process could be “that no feasible standardized solution would be sufficiently useful or accepted, or that no solution is forthcoming that will sufficiently address critical requirements.” Nevertheless, copyright expert Bill Rosenblatt writes, there’s “a growing recognition among publishers that DRM has aspects that work against their interests, including its lack of user-friendliness and eBook distributors’ use of the technology to ‘lock in’ consumers.”

The lightweight DRM Rosenblatt proposes would look something like this:

• Books are watermarked and users can share them, but “unlike watermarking alone, cracks would be considered definitively illegal.”
• The DRM would include a password option that “could be used to discourage ‘over-sharing’ by requiring passwords that contain personal information, such as an e-mail address or credit card number.”
• There are limits on modification, copying and printing “in a matter similar to the encryption incorporated in PDF.”
• It would work for libraries and could be made stricter for library lending.
• It wouldn’t require network connectivity and a reader could still access his or her files if a company goes out of business.
• It wouldn’t impose “excessive restrictions on user behavior, such as prohibiting uses that could well be permissible under copyright law” like reading an e-book on a different device.

Overall, Rosenblatt writes, “a standard method of protecting eBook content that becomes broadly adopted would materially increase interoperability, ameliorate some of the ease-of-use limitations in current DRMs, and may promote broader adoption of digital reading.”

IDPF is taking comments through June 8.

via paidcontent

4:13 p.m. ET: Facebook’s stock came full circle on its first day as a public company, ending the day at $38.23 with more than 500 million shares traded. That’s barely up from its opening price of $38, but shows that Facebook priced the IPO well, although the company may have had some help from underwriters propping up the stock in the closing hours. But with a market cap of $104 billion (according to Yahoo Finance), Facebook is staked with a lot of capital to build on its growth.

3:52 p.m. ET: Facebook’s share price is back where it started at $38. The much anticipated pop is not happening. There’s still time for the stock to dip below its opening price. Facebook priced this well for itself but it won’t get the buzz that comes from a big first day.

3:00 p.m. ET: Facebook’s share price has slipped below $40 to about $39 putting it up about 3 percent on the day. The same can’t be said of Zynga, whose share price continued to drop after trading on the stock was halted a couple of times. The shares are down about 12 percent now.

2:11 p.m. ET: Doesn’t look like we’re going to get a Facebook pop today, unless things heat up later: we’re still hovering between $40 and $41. 386 million shares have changed hands so far today, and speculation is now turning toward what went wrong at the Nasdaq this morning: some traders apparently weren’t sure if their orders had been processed.

1:06 p.m. ET: Not much change in Facebook’s price, which is now at about $41 a share. Interestingly, shares of LinkedIn, Yelp and Pandora are down today. The Wall Street Journal is reporting that underwriters stepped in to ensure Facebook’s stock didn’t dip below itss opening price of $38.

12:48 p.m. ET: Facebook shares continue to float around a bit, hovering around $40 to $41 dollars a share. Meanwhile, Zynga has taken a hit today with its stock price falling by 13 percent following Facebook’s debut. Zynga’s stock, which was halted for a time, is off about 5.68 percent.

12:04 p.m. ET: So far, no big pop for Facebook. Shares seem to be holding strong in the $38-$40 range, just barely above its offer price. The stock price is about $39.51 right now.  At least it’s not pulling a Zynga, and falling below the opening price on the first day. ButLinkedIn, Groupon, Zillow and other recent tech IPOs saw at least a 30 percent pop on the first day of trading.

11:31 a.m. ET: And we’re off! As had been reported earlier this morning, Facebook started trading around $42. Shares are currently at about $40.90, about 7.6 percent above the original price of $38. According to Reuters, 82 million shares changed hands in the first 30 seconds.

11:20  a.m. ET: Alright already, NASDAQ. Trading was supposed to start at 11:05 a.m. But, here we are 15 minutes, still waiting… We’ll keep you updated.

Earlier: The time for talking has passed, and the time for buying has begun. Later today shares of Facebook will begin trading on the NASDAQ stock market in an initial public offering that could set records for the tech industry and rank among the most valuable IPOs in American history.

We’ll track the price of Facebook’s stock below, updating this post throughout the day with news and information about the event. The NASDAQ opens for trading at 9:30 a.m. ET, and closes at 4:00 p.m. ET. Facebook won’t go live immediately — the exchange saves IPO trades so they get their own special boost: we’re expecting Facebook trades to start at 11.

In the meantime, please check out our Facebook IPO coverage up until this point as well as our chart listing recent digital media IPOs, none of which have been as impressive as Facebook’s IPO is expected to be. And if you need some light relief or director’s commentary, check out our links to what the rest of the web is saying.

via gigaom

In many ways Facebook is a very American success: forged at Harvard, warmed up in the crucible of Silicon Valley, and now reaching boiling point by becoming one of the nation’s most valuable companies. But it’s also a very international business, too, with 900 million users spread all around the world.

The company has made no secret of its ambition to make sure every person on the planet is connected to its service. What might seem like hubris, however, is actually necessity: with Wall Street now breathing down its neck, overseas growth is important — investors want to see that however big it has become, Facebook still has headroom left. (Check out our chart of five countries outside the U.S. that could provide Facebook with a lot more users.)

So how will it manage?

First, use its headstart

To understand Facebook’s approach to international growth, it’s worth looking back at the way the company became so global quickly.

From very early on, Facebook had a strong foreign user base. In fact, unlike most companies, it was not really the company’s home success that drove its foreign expansion — it was foreign expansion that fueled its meteoric rise and underpinned its blockbuster flotation.

As early as 2007, the vast international potential was becoming very clear, when London became the single most popular city on Facebook. But then came perhaps its smartest move of all: instead of spending months deciding which markets to target, building local sales teams and internationalizing its product accordingly, Facebook designed a tool that let users translate the service into their own language — effectively crowdsourcing what is usually a slow, labor-intensive job.

And it proved a stunning success: in less than 24 hours, for example, 90 percent of the site had been translated into French. Former Facebooker Andy Johns has called it “the greatest lever” the company had for growth:

It made Facebook a platform capable of supporting everyone on the planet… Growth was not about hiring 10 people per country and putting them in the 20 most important countries and expecting it to grow. Growth was about [engineering] systems of scale and enabling our users to grow the product for us.

It was an inspired, engineering-led approach that allowed Facebook to rapidly scale out into dozens of new territories without ever targeting or investing in them specifically. Take Turkey, a fast-growing internet market with its own language. Without any member of the team ever targeting the country as a business prospect, Facebook became the country’s number 1 social site — and now boasts 92 percent market penetration.

This has all given the company huge reachat relatively little cost, and brought in a ton of revenue too: this year is likely to be the first in which Facebook will make more money outside the United States than in them (U.S. revenue fell from 62 percent in 2010 to 56 percent in 2011).

It’s easy to underestimate the importance of that number. But for some context, compare that with Google, where international revenue only outstripped U.S. revenue for the first time in 2008 — four years after it went public.

Continued international progress is massively important, not least because it’s where new users are coming from.

Pingdom, which found Facebook’s six-month U.S. user growth at just 0.86 percent compared with Brazil’s 54 percent, says: “It seems evident that Facebook needs an expansion plan that involves all corners of the world, but that focuses on certain regions, like Africa and Asia.”

Facebook acknowledges the problem, and the opportunity. Alongside mobile and advertising, it has sold investors on hoped-for international growth. “There are more than two billion global internet users, according to an IDC report dated August 2011,” its S-1 read. “And we aim to connect all of them.”

Now it just has to deliver on that promise.

So where next?

The omens for continued expansion may be good. Thanks to its translation success, Facebook has already unseated eight dominant local-language competitors in the last two years, according to comScore – most recently, Orkut in Brazil and Poland’s Nasa Klasa.pl.

Recent data from Pingdom shows strong gains in other countries, leaving just a handful of nations where Facebook is not the top dog: China, South Korea, Japan, Vietnam and Russia.

“Now there are only five markets where Facebook is not the #1 social networking site,” a comScore spokesperson told us. “What’s interesting here is that Vietnam, Japan and South Korea are amongst the top four fastest growing markets, with year-over-year growth rates of 80 to 270 percent.”

But these remaining countries are also the toughest nuts to crack. And the biggest prize of all, China, may need a sledge hammer — after all Facebook is blocked by the country’s Great Firewall.

If it can piggyback China’s explosive broadband and mobile internet adoption, Facebook’s own growth may surge even further. But this will be anything but a walk in the park.

Investors have been warned. Facebook’s s-1 filing cautioned:

“We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government.

“In the event that access to Facebook is restricted, in whole or in part, in one or more countries or our competitors are able to successfully penetrate geographic markets that we cannot access, our ability to retain or increase our user base and user engagement may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected.”

China’s state authorities grant spartan online operating licenses to overseas players, especially powerhouses, leaving the market to indigenous networks, which themselves are allowed to operate only under a strict regime of monitoring and censorship by the government.

That is a controversial and technically difficult task for any social network. But, if it’s good enough for China’s own, it may be a move that Facebook, too, has to consider if it wants to break in.

But it’s not just China that could prove tricky. Google can attest to the difficulties of launching in unfriendly countries. Its $140 million acquisition of the Rambler portal’s Begun contextual ad agency was blocked in 2008 because of what Russian competition authorities said was insufficient paperwork.

And, while trying to make inroads to its five target nations, Facebook must also be on its guard to make sure it protects its leading position in other markets, many of which are small enough that launches or improvements from indigenous competitors could have profound impact.

The revenue question

Even if the company can push growth numbers by securing a dominant position in every single one of the world’s countries, there is another big question: how to keep revenue going up internationally too.

This is a very important problem it faces: during its IPO roadshow, executives explained that while an American user with high disposable income was worth $9.51 in Facebook ad revenue last year, Europe was worth considerably less at $4.86. Asia, meanwhile, came in at $1.79 and the rest of the world made Facebook just $1.42 per user.

So while international growth may be large, the granular detail on income is less impressive. These are not figures that will please Facebook’s investors if they do not rise — and, asThomas Crampton of Social@Ogilvy & Mather’s Asia-Pacific unit has pointed out, users in lower-income countries like India are going to be hard to monetize more effectively.

Getting average revenues up could mean international users seeing more ads; working more partnerships outside the U.S.; using its scale to push revenue strategies that go way beyond advertising (such as a Facebook credit card). It could even require the company ditching a reliance on engineering solutions in favor of pushing harder at the drearier but tried-and-trusted approach of building large local sales teams.

Whatever the case, you can be sure Facebook will be trying everything it can to increase its international audience — and make it as valuable as possible.

via gigaom

But as monthly video data released by comScore shows, both companies have managed to significantly increase the amount of time viewers spend watching video on their respective channels.

Also read: TV nets wrap upfront week: “The biz still goes through us”

According to comScore, viewers spent an average of 434.8 minutes in April watching video on Google channels, a grouping the mainly includes the assets of YouTube. That represents an uptick of 55 percent over April 2011.

On Yahoo channels, meanwhile, viewers spent an average of 73.7 minutes in April watching video, nearly double the 37.5 minutes they averaged in April 2011.

While time spent viewing these leading digital channel operators has increased dramatically, total unique viewers watching them has not.

Tabulating 157.7 million unique video users in April, Google sites experienced only an 11 percent increase over April 2011′s tally of 142.7 million.

Yahoo, meanwhile, was virtually flat, counting 53.6 million uniques in April compared to 53.2 million during the same period last year.

These year-over-year benchmarks for the leading internet video providers follow trend lines of the broader online video industry.

For the entire online video universe, comScore tabulated 180.8 million unique viewers in April, up just 5 percent over April 2011. However, total minutes spent watching online video increased 46 percent to an average of 1,307.7 (I know, who are the people with all this time who are top-weighting these averages?).

Even with the uptick in consumption, YouTube and Yahoo’s rise in usage has come at a cost to others.

Vevo traffic continues to slide

Music video giant Vevo, for example, saw its unique viewers plummet 10 percent to 49.5 million over the same period, while its average viewership time declined by 41 percent to 57.9 minutes. (The comScore report doesn’t track mobile usage, so it’s hard to tell how many viewers are migrating to mobile platforms.)

Also, Viacom digital, the leader among traditional media companies in the digital video realm, saw its average viewer time drop 27 percent to 58.9 minutes (unique viewers were flat year over year at 41.2 million).

via paidcontent

Big Idea: Raspberry Pi is a small, lightweight computer that runs on Linux and costs next to nothing — the Model A retails at $35, while the forthcoming Model B will be priced at $25.

Why It’s Working: By far the cheapest computer on the market, the creator of Raspberry Pi hopes to get the gadget in the hands of children all over the world.

“Many [kids] just don’t have computers at all,” Upton explains. “If they do, it’s a family computer, and you don’t want to mess with it.”

So, he began the Raspberry Pi Foundation. Registered as an official UK charity, the organization had a single goal in mind: to put cheap computers in the hands of youth and encourage them to expand their programming horizons. Upton says that the first Raspberry Pi computer had the capacity similar to the original computer he learned to code on, but he decided through multiple iterations that it would be more attractive with a modern spin and a Linux OS. And in order to keep production costs low, Upton says that the hardware for the flashcard-sized Raspberry Pi is decidedly no-frills — simply a core computer running on a mobile phone chipset developed and provided by Upton’s employer, Broadcom. The results of many prototypes were the Raspberry Pi Model A and Model B.

“What we’ve ended up with is something that’s very powerful from a multimedia level,” Upton explains. “We’ve styled the user experience to a recognizably modern thing while staying at the same price point.”

And that price point is shockingly low. Cost-efficient parts and minimal overhead contributed to the Model B’s jaw-dropping $35 MSRP — and sent geeks from all over clamoring to get their hands on it. Upton says that even as early as January, the organization only expected to sell 10,000 units. Instead, the Model B’s February launch on Leap Day of this year crashed the websites of the vendors who sold out in minutes.

“I think the numbers that are kicking around now are well over a quarter of a million units ordered so far,” Upton says of the Model B’s sales. “We’re very pleased.”

And it’s not just geeks looking to get a piece of the action. Upton says that the foundation has been approached by commercial companies, hospitals, museums and others looking to integrate the Raspberry Pi’s low-cost computing systems into their own everyday services. He adds that while the company is maintaining a strict role as a distributor of materials, the foundation has given special consideration to orgs looking to do good with the tiny computer.

“We’ve been helping people by making sure they get early access to boards and making sure that they’re getting a little support to put them in the right direction,” Upton adds.

But this is just the first step toward Upton’s larger goals. He says he hopes to debut the even cheaper Model A, which will be priced at $25, sometime before the end of the summer. Looking ahead, Upton says he’s excited to implement specialized software, tutorials and sample codes to encourage kids (and adults) to tackle the world of home programming.

“We’re trying to put the fun back into the computing,” Upton explains. “So now we have things going out the door. The goal is to refocus and make a polished educational offering around the device.”

Well, that was anticlimactic.

After all the hullabaloo about Facebook’s IPO, this is how it ends, with a mere $0.23 jump in share price? That kind of movement is what happens after Procter & Gamble announces a more absorbent type of Pampers.

Yet it shouldn’t be all that surprising that Facebook’s opening day on the NASDAQ had all the excitement of a Matlockrerun. While no one knows exactly why Facebook landed with such a thud, there are a handful of good reasons that the company got poked by Wall Street. Among them:

1. It Was Priced Just Right

That, however, depends on what your definition of “accurately” is. James Brau, professor of finance at Brigham Young University, says that over the past 40 years of IPOs, the average first-day pop is 18%.

So, if Facebook was looking to perform along those lines, it should have priced its shares in the low 30s.

In addition, underwriters don’t aim for a flat performance on the first day because of a practice called “leaving money on the table,” which rewards institutional investors for getting on board. Though that looks like a kickback of sorts, Brau says there’s no clear-cut reason why IPOs always factor leaving money on the table in.

“There are at least 50 different academic studies I know of that that have 35 different theories,” Brau says.

One popular theory is that it’s a way of rewarding such investors for honesty. The argument goes like this: During an IPO road show, the company and bankers are looking for an accurate read on what investors plan to spend.

If such investors didn’t know that they would be rewarded for telling the truth, then they would intentionally low-ball the amount they intend to buy at. If an institutional investor thought that the stock should be worth $10, say, then they might say they’ll spend $8 to enjoy the ride on the opening day.

2. It’s NASDAQ’s Fault

“It threw it a bit of a curve,” Pleines says. “It may have held it back a little bit.”

3. Investors Are Wary of Social Media Stocks

4. It’s GM’s Fault

Though no other advertisers appear to have followed suit, the move didn’t reassure investors who were already nervous about Facebook’s first-quarter revenue slide and its admitted inability to transition its ad model to mobile.

5. It’s Overvalued

The Golden Arches, with restaurants all over the globe, close-to 100% brand recognition and a proven business model, posted $27 billion in revenues last year and a $5.5 billion profit. Facebook made $1 billion on $3.7 billion in revenues.

Not surprisingly, 79% of investors in a recent Bloomberg poll thought that Facebook was overvalued. As Espen Robak, the president of Pluris Valuation Advisors, told The Atlantic, Facebook’s valuation is plausible because of the company’s tremendous reach.

But, as Robak told the publication, no one knows how Facebook will be able to monetize that reach.

“Think of it this way,” said Robak. “Google has a pretty standard price-earnings ratio right now — around 15 to 20. That’s where Facebook will ultimately have to get. They need vastly larger profit.

“How many more ads can they sell? Four times more in the next year? I don’t think so. They have to get revenues from somewhere else.”

Robak thinks that maybe — just maybe — Facebook will be able to tap into its user data to provide a new solution to advertisers.

6. Retail Investors Are Taking a Wait-And-See Attitude

According to Pleines’ data, no matter how well the recent social media IPOs did on opening day, their stocks were still down — across the board — after the first month.

But it’s not just a social media thing: We may not remember it well, but Google’s stock languished for a month or more after its debut. “While Google did not trade lower in its first month of trading, it did trade back its original open price of $100,” Pleines wrote in a recent note to clients. “But after that it never looked back, trading as high as $196 over the next three months.”

In other words, the question of Facebook’s true value wasn’t answered on Friday. In all likelihood, we won’t know for a few months at least.

via mashable

Lawyers tried to ruin Mark Zuckerberg’s big day with a sprawling lawsuit that portrays the Facebook founder as a rogue hacker, and accuses the company of tracking users on their computers and iPhones. The lawyers want to collect $15 billion for you and me and nearly everyone else on Facebook.

Here’s a plain english Q&A of what’s going on:

What did Facebook do that was so wrong?

The company placed files on users’ computers called cookies that told the social network which websites they visited.

Is that so unusual? I thought lots of sites do that

The problem is that Facebook appears to have tracked you even after you logged-out. Under the company’s own policy, it promised not to do that and thus violated the limits of your consent when it did.

How exactly did Facebook track me?

Many websites like CNN or Justin Bieber Zone have a “Like” button that acts like an extension of Facebook. The company collects data about your visits to those sites — including, it seems, when you are logged out. The unauthorized tracking reportedly took place across smartphones and tablets too.

Well, maybe this was an honest mistake?

After blogger Nik Cubrilovic called out Facebook for stalking its users, the company awkwardly suggested that the tracking of logged-out users was a “bug” or a narrow technical measure. That claim hasn’t stood up well. Cubrilovic and German regulators soon called BS and suggested Facebook was doing this deliberately for more than a year. The lawsuit also points to a Facebook patent application for cookies that follow users after they log out.

So where did this lawsuit come from?

There are actually more than a dozen cases across the country. They were recently consolidated into one lawsuit in San Jose, California.

Why are the lawyers asking for $15 billion?

It’s a great way to grab headlines during a week the press is already in a Facebook frenzy. The $15 billion itself is loosely based on the Wiretap Act which lets people sue for $10,000 if someone records their conversation without permission. The lawsuit also cites studies that claim an individual’s web history is worth $52. There are also state law penalties. And so on. The lawyers had to pick some number so they chose $15 billion.

Will Facebook actually have to pay that $15 billion?

The short answer is no. The Wiretap Act was written with telephone conversations in mind so it’s no slam dunk that a court will decide the law should apply the same way to computer cookies (Google, HTC and Samsung are facing similar lawsuitsunder the same legal theory). At the same time, some judges have ruled that Facebook-style “privacy invasions” aren’t worth anything in dollar terms because no one has been harmed.

In this case, however, a judge would likely conclude that Facebook’s behavior (if the allegations are true) was egregious enough to find liability under at least one of the plaintiffs’ 11 claims. But if other tech related privacy suits are anything to go by, the case will settle long before a trial.

I’m on Facebook. Will I get some of that money?

Doubtful. While the class action aspires to cover everyone who was on Facebook from May 2010 to September 2011, a cash payout is unlikely. As noted above, judges have a hard time putting a dollar value on this type of privacy breach. When there has been a privacy settlement in other tech-related cases (like Google Buzz or Facebook Beacon), the money has been divided up between lawyers and non-profit groups that act as privacy activists.

What does Mark Zuckerberg have to do with all this?

The lawsuit paints the Facebook CEO as a creep who has a long history of using his hacking skills to steal people’s personal data. The complaint opens by reproducing this email exchange:

The lawsuit also lists a chronological history intended to show that Zuckerberg and his company have long displayed a systemic disregard for user privacy. This is, of course, just a legal tactic that doesn’t necessarily prove that Facebook is any better or worse than other tech companies on privacy issues. Facebook, which told Bloomberg the complaint is baseless, would likely add that this was an accident that shouldn’t detract from the fact it provides a popular free service to millions of people.

Are lawsuits the best way to solve the privacy problem?

Probably not. But since the government often has a hard time understanding (let alone regulating) the tech industry, the lawsuits can be an effective way of raising awareness and forcing companies to take care about how they handle consumer data.

Here’s the complaint itself:

Facebook Wiretap Act Complaint Copy

via gigaom

On Wednesday, Viacom finally reached an agreement with Time Warner Cable, enabling the pay TV service provider to stream the media conglomerate’s shows on iPads, notebook computers, smart phones and other digital devices.

The agreement ends a 13-month court disputebetween the two companies, which started after Time Warner Cable began streaming Viacom cable channels including Nickelodeon, MTV, Spike TV and Comedy Central to its nearly 12 million customers.

In suing the No. 2 cable provider in the U.S., Viacom claimed that Time Warner needed to pay for the right to stream its content. The cable company claimed that its ongoing carriage deal with the conglomerate gave it those rights.

Separately, Time Warner fought Cablevision over the same issue last year. These disputes have caused many to wonder if TV Everywhere — the broad-reaching pay-TV industry initiative that seeks to broaden the reach of bundled subscription television into the digital realm — will ever get done.

With consumers expanding their video usage well beyond the living-room TV screen, the multi-channel industry sees TV Everywhere as the weapon needed to ward off new, so-called “over-the-top” competition from on-demand program distributors like Netflix.

TV Everywhere requires each program supplier to make individual deals with each multi-channel operator. At the time Viacom and Time Warner Cable entered the courtroom, there was a lack of clarity on some very basic and necessary dealmaking infrastructure — i.e. what should the ability to stream video be worth on top of already agreed-upon carriage fees?

So with a streaming deal in place between a top cable programmer and leading cable provider, are we closer to having established those basic terms?

Tough to say yes on that one.

Notably, Time Warner Cable and Cablevision settled their dispute all the way back in August, but that doesn’t seem to have created the kind of template that would spur a sudden flurry of TV Everywhere dealmaking And in the joint statement announcing their agreement Wednesday, Viacom and Time Warner included the following coda: “Neither side is conceding its original legal position or will have further comment.”

via paidcontent

Amazon is trying to sell ads that would appear on the Kindle Fire’s welcome screen, AdAgereports, at prices of at least $600,000 for a two-month campaign. Does that mean a cheaper, ad-supported Kindle Fire is coming soon?

Amazon already sells ad-supported Kindles at a discount. The cheapest Kindle is $79 with ads or $99 without. The Kindle Touch WiFi is $99 with ads or $139 without. The Kindle Touch 3G is $149 with ads or $189 without.

AdAge cites executives who seem uncertain about whether the ads Amazon wants them to buy would be used on a discounted Kindle Fire or just thrown onto the regular version. One unidentified exec says, “You’re already paying a premium for the product and then having that unexpected ad experience makes for a worse consumer experience. There needs to be a value exchange.”

Amazon has likely already thought of that. The company prides itself on customer service above almost anything else, and it probably wouldn’t start including ads on the Kindle Fire without a widely promoted discounted price. The Kindle Fire software is probably already able to support ads (since on the ad-supported Kindle e-readers you can pay $30 to turn the ads off) so Amazon wouldn’t have to launch an entirely new Kindle Fire model to have it be ad-supported.

All the company has to do is decide how much cheaper an ad-supported Kindle Fire will be. The Kindle Fire is $199 now. The company could knock off $30 or go for a bigger discount in preparation for the 2nd-generation Kindle Fire rumored to launch later this year.

via paidcontent