Yahoo announced on some changes to it bidding system for keywords.

“”We are changing the way we set the minimum bids required to participate in a Sponsored Search keyword market. In the next several weeks, we will start calculating a variable minimum bid for some of the keywords you’re bidding on. That means that sometimes the minimum bid may be lower than 10¢. Sometimes it may be higher. Content Match minimum bids currently will remain at 10¢.””

They further explain

“Previously, the minimum bid for any keyword in our system was $0.10. With this change, the minimum bid required to participate in a keyword market can be higher or lower than $0.10. The amount set as your minimum bid on a keyword can vary depending on multiple factors, such as the relevance of your keywords (as measured by the quality of the ads associated with them in an ad group), and the number of bidders and their bid amounts in the particular keyword market. It will not be based on advertiser conversions.””

“”When the first phase of this pricing change is launched in the U.S. in the first half of 2008, some Sponsored Search advertisers may begin to notice that a portion of their keywords have minimum bids of more or less than ten cents. However, it is impossible to specify exactly how many of your keywords will have minimum bids of more or less than ten cents, because keyword markets are always in flux. Please note that even for keywords participating in the first phase of this change, many Sponsored Search advertisers will see their minimum bids for some keywords remain at $0.10 (or some other minimum bid amount), either temporarily or in the long term. We plan to expand the scope of this initiative over time to a number of keywords and international markets.””

It is our understanding that one of the other changes is that for adult terms the minimum bid will be reduced from $.10 to $.05.