Ah. I see. I had no idea about the state of things. This is only the second time I've purchased an XBL membership. Each time it was $35.
You just never know with Microsoft. I bought a $40 membership in between two $35 memberships (still kicking myself for that one) because before this month, $35 for a year of live was a fairly rare deal. The alternative was $45+ to pay for a year and most people don't want to wait a few days/weeks just to save $5-10 if their friends are online begging them to play.