It is not money, but getting advertised.
Amazon unveiled yesterday a very strong tablet line-up that includes the Kindle Fire and two Kindle Fire HD models including the 8.9-inch model that directly competes with the iPad. The 8.9 inch Kindle Fire HD starts at $299 with 16GB. This price is dramatically low. Amazon made clear in the announcement that they intend to make money on the content you buy and not on the gadget. One thing that Jeff Bezos did not really go into is that Special Offers is now on all Kindle devices. Amazon is making that clear though in the press-release:
"The new Kindle Fire family comes with special offers that appear on the lock screen. Examples of special money-saving offers that customers will enjoy include a $5 credit in the Amazon MP3 Store and a $5 credit for select titles in the Amazon Instant Video Store. Customers will also receive special offers and screensavers from brands like AT&T, Discover and Intel, such as a special offer of a $10 Amazon.com Gift Card when a customer uses their Discover card to purchase a digital product on Amazon."
This is the price you pay. You get advertised on the home screen of your Kindle Fire HD. Some might turn this off, but most me included have so much trust in Amazon that you actually save money with those advertised deals.