The Kindle, Amazon's best-selling product, has just gotten more compelling. Amazon has dropped the price of its popular e-book reader by $25 to $114, a signal that the company is making its way towards offering a $99 version of the device. 

The new Kindle will have the same hardware specifications, but it will feature advertisements. It will be sold alongside the current models of the Kindle -- the $139 WiFi version, as well as the $189 3G model.

The advertsiements are what suports the price cut. Joined by small banner ads on the device's home screen will be full-screen versions, which Amazon calls sponsored screensavers.

But the company was quick to try and soothe fears that the Kindle's special offers functionality will interfere with the reading experience. No advertisements will appear within the pages of books themselves -- a major relief for Kindle owners drawn to the device's interruption-free interface.

We think customers are going to love it, said Kindle Director Jay Marine to the Associated Press. Amazon will also bundle the device with an app called AdMash, which allows Kindle owners to vote on their favorite advertisements. These results will in turn be used to determine which ads will become sponsored screensavers.

So far, General Motors, Visa, Chase, and Proctor & Gamble have all agreed to have their advertisements appear on the device. Amazon is also offering a daily deals-type service, similar to LivingSocial or GroupOn. In December, Amazon invested $175 million in LivingSocial.

At $114, the newest version of the Kindle is a significant departure from the original iteration of the device, which ran for $399 when it was released in 2007. Subsequent versions have gotten progressively cheaper, culminating with Amazon's most recent announcement.

But Kindle director Jay Marine denied that Amazon was on its way to offering a free version of the device. It's not possible. The economics don't work, he told All Things Digital on Monday.

What is certain, however, is that Amazon will before long drop the price of the Kindle again, likely crossing the psychologically-significant threshold of $100.

Amazon has already opened pre-orders for the device, will be released May 3rd.