CONFIG_KVM_E500 is not available for thedefaultarchitecture x86.
Result is shown for architecture powerpc

KVM support for PowerPC E500 processors

modulename: kvm.ko

configname: CONFIG_KVM_E500

Linux Kernel Configuration
└─>Virtualization
└─>KVM support for PowerPC E500 processors
In linux kernel since version 2.6.30 (release Date: 2009-06-09)  
Support running unmodified E500 guest kernels in virtual machines on
E500 host processors.

This module provides access to the hardware capabilities through
a character device node named /dev/kvm.

If unsure, say N.

source code:
selects
CONFIG_KVM

depends
CONFIG_E500
CONFIG_EXPERIMENTAL
CONFIG_VIRTUALIZATION