Yahoo PPC Price Increase – CPCs up 25%?!

Today I saw an interesting notification from Yahoo!

Dear Product Submit advertiser,

From November 2, 2009, until December 29, 2009, Yahoo! will be making a seasonal rate adjustment by increasing the cost per click (CPC) by 25% in all categories. This means that during this period your actual billed CPC will be 25% higher. This adjustment reflects the increased consumer buying activity during the holiday shopping season, which is typified by increased leads, better conversion to sale, and increased revenue for our merchant partners. The 25% adjustment to your billed CPC will be reflected on your Click Report and in your invoice.

Please Note: You will not need to make changes to your account before or after this period.

I get the mentality here, though I don’t agree with it.25% seems like quite a hike to blanket all categories. Usually, CPCs are determined by the competitiveness of the market and bids of others in that market. Raising everything off the bat is an interesting tactic as it could be seen as gouging their current customers rather than increasing profits through expanding their market share.