Our Search Engine Performance Report: Q1 2008 reported that MSN had the highest ROI among the three major search engines. Advertisers know that MSN has the highest quality traffic, but many people do not understand the concept of traffic quality when it comes to search. Below is an explanation of syndication and analysis of search traffic quality on Google, Yahoo, and MSN.
To increase their reach, and therefore increase revenue, Yahoo and Google have built a business of syndicating their search results on other sites across the web. These sites can include ISPs (e.g., Verzion, RoadRunner), meta-search engines (e.g., MyWay, Dogpile) or other search engines (e.g., Ask, AOL). They can also include media sites (e.g.,CNN.com, Weather.com, MySpace.com) as well as domain parking sites (e.g.,airlinetikets.com, coldwell.com). Search results are also served on retail sites like Shopzilla and eBay. To see this in action, go to one of these sites, and search for an item, say "table lamp." Scroll down to the bottom of the page, and you will see syndicated search results. In Q4 2007, Yahoo began serving search ads on eBay, which resulted in a huge impression increase and corresponding decline in CTR (as reported in the Search Engine Performance Report: Q4 2007), since users are far less likely to click on these search ads at the bottom of a page of product results than the ads on a typical SERP.
MSN, unlike Yahoo and Google, does not syndicate its search results. The chart below will show you why this is important for ROI. We took a sampling of advertisers across 4 different verticals and calculated 1) the average number of sites the the search results were shown on that resulted in clicks, 2) the percentage of total clicks that came from the engine's pure search property (e.g., www.google.com, search.live.com) and 3) the percentage of conversions that came from the pure search property. This analysis did not include ads shown on the search engines' content networks.

Nearly all of MSN/Live Search traffic is being served on pure search.
The few remaining "syndicates" are within the MSN network, where search
intent is generally high. Thus people are actively seeking a relevant
search result when a search ad is served on the MSN adCenter platform.
Google and Yahoo!, however, have large syndication networks. Yahoo's syndication network is the largest, with only 45% of its paid search clicks coming from search.yahoo.com. However, 58% of its search conversions came from clicks on search.yahoo.com, showing that in general, syndication traffic does not convert at the same rate as pure search traffic. There was an average of nearly 1,200 sites per advertiser where Yahoo search ads were being served during a 7-day period.
Google's syndication network is not nearly as large, with an average of 431 sites per advertiser that captured clicks. Searches on www.google.com accounted for 59% of total search click volume and 75% of conversions, again showing that pure search traffic converts better than syndicated search traffic.
One point of speculation about the Microsoft/Yahoo takeover is what they would do with the search properties. The Q1 report showed that MSN captured 5% of US search spending in Q1 2008, while Yahoo accounted for 18%, which leaves the two to battle Google's 77% share. Which search platform has the better chance of competing against Google: adCenter or Yahoo Panama? That question cannot be taken out of the context of traffic volume and traffic quality. AdCenter had great conversion rates because its traffic quality is high, but its volume of traffic is low, as represented by its share of spending. Yahoo has higher traffic volume, but its quality is poor due to its large amount of syndicated traffic. Adding bells and whistles to an ad platform will not help it increase volume, nor will it increase traffic quality. Google has high volume and decent traffic quality, which is why advertisers continue to flock to it, and Yahoo and MSN will continue to struggle to compete.