This one of discussion took place on Google Webmaster Chat at
Q&A from the 3rd live chat, Oct. 2008 - Google Webmaster Help | Google Groups
This is one question I am concerned about :-
chrisff, palo alto, ca: Is the bounce rate and speed taken into account when ranking a page? i.e. if you see a searcher click on a result then return very quickly and choose another result, is the first page ranked lower?
JohnMu: Hi chrisff, assuming that users will be jumping out of a site like that, there's a high probability that they won't be willing to recommend it to others (or come back themselves). So yes, indirectly at least, if a site is made in a way that users run away right away, then chances are that we might not be recommending it as much as other sites that users like (and recommend to others).
I personally feel traffic from Google SERP and bounce rate does add a small factor to Website's ranking.