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Should one Advertise on Search Engines that get far less Traffic than Google, such as Microsoft?

Absolutely!
I recently ran three similar campaigns: one on Google, one on Yahoo and the third on Microsoft. My click per cost on Microsoft was less than half that on Google. (Yahoo was in between the two). Even though this comparison was not done under “strict lab settings”, the point is that Microsoft will deliver you a visitor to your site for less dollars than Google. This is precisely because fewer advertisers are advertising on Microsoft (compared to Google) and therefore there is less competition in general for any given keyword. 

So let me now ask the opposite question. Why aren’t more people advertising using Microsoft’s AdCenter if they, in fact, are going to pay less per visitor? 

The main reason, perhaps, is that even though it costs less to get a visitor, Microsoft will not deliver a lot of total visitors due to its lower market share for search volume, and hence, one must weigh that off with the time and effort it takes to simply set up and manage yet another campaign. 

However, for those who are up for it, your return on ad spend (ROAS) will almost certainly be higher on Microsoft compared to Google. (Yahoo is probably somewhere in between).