According to an email from Yahoo Search Marketing, minimum bids are no longer fixed at $0.10. This could be due to a improved ad network since Yahoo has taken great measures to begin fighting arbitrage traffic. I think this is a great step for Yahoo to take. Google already allows the advertiser to bid less than .10, and has also tightened its quality scoring and guidelines to fight the arbitrage. In the end i think we may see a better conversion for advertisers, and better payouts for publishers. The email below is directly from Yahoo. I thought i would include it for you to see.

The email from Yahoo reads:

Starting in the next several weeks, the minimum bids for a number of Sponsored Search keywords will no longer be fixed at $.10. Your new minimum bids can be lower or higher than $.10. Content Match minimum bids currently will remain at $.10.

This update is intended to align your minimum bids with the value and quality of your keywords. It also is designed to help improve the overall search user experience by rewarding advertisers for better quality with lower entry points into keyword markets.

The amount set as your minimum bid on a keyword in Sponsored Search can vary depending on multiple factors, such as:

• The relevance of your keywords (as measured by the quality of the ads associated with them)
• The number of bidders and bid amounts in the particular keyword market.

A keyword term becomes “active” — switched “on” in the system and eligible for display — when your bid is equal to or greater than your minimum bid. If your bid falls below your minimum, your keyword will not be displayed. You’ll be notified of such changes and will have some time to adjust your bid.

What You Should Do to Prepare
• Get to know your keywords and their value.
Since minimum bids can vary by keyword, it is important to know which keywords work best for your business. Remember, you can check and set your bids at the keyword level. Learn more.

• Improve ad quality to potentially receive lower minimum bids.
Your minimum bids generally take your quality into account. In some instances, higher quality means that you could have a lower minimum bid. Learn more.

• Learn about updates to the account interface.
Become familiar with new tools that can make managing your keywords simpler. Learn more.

For more information on this change, please read our FAQs.
What you need to know…
• Sponsored Search minimum bids are no longer fixed at $.10.
• Content Match minimum bids currently will remain $.10.
• Higher ad quality may help you receive lower minimum bids.
• What you should do to prepare
• How minimum bids are set