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Ebay (NASDAQ: EBAY - news) became a victim of its own success at the weekend after a surge in the number of items for sale caused the world's largest online auction site to crash.

Millions of shoppers were first unable to search for items on the website on Saturday, during the crucial run-up to Christmas, after a computer system failure.

Ebay said there had been a huge rise in the number of items listed for sale on its site in the run-up to the holiday season this year. It currently has more than 200m live listings, 33 per cent more than at this time last year.

On Sunday, the company's website still said it was working to resolve the technical problems, which had first been noticed at about 11am Pacific Standard Time on Saturday.

It will be one of the worst outages suffered by the company in recent years. Ebay could be left with a hefty bill to compensate sellers for losses caused by the outage.

"Our immediate priority is to resolve this issue," Ebay said. "Once that is achieved, rest assured that we will assess the economic impact of this issue and will be compensating sellers appropriately. In the meantime, we will be issuing full fee credits for affected listings."

Many sellers have complained that they received much lower prices for their goods because people were unable to bid.

Goods tend to be listed on Ebay for a set period of time - often seven or nine days - and the bid price ramps up towards the end of the period as buyers compete for the item in the closing hours of the sale.

"We had a number of auctions close today that we started at $0.99 with no reserve a week ago. These items were up to $160 in retail value. The items closed between $5.84 and about $42," one seller wrote on a internet forum.

Geoffrey Holland, a Vancouver-based merchant who sells CDs and DVDs through his Gbayemporium store on Ebay, estimated his losses at $500-$600.

"On a busy November (Frankfurt: A0Z24E - news) shopping day I would have normally expected to sell more than 100 items. Yesterday I sold 11," he said.

The number of merchants selling items on the site usually rises in the run-up to Christmas, but this year's rise has been particularly steep because Ebay has encouraged large retailers to sell through the site, which until recently was the preserve of individuals and smaller retailers. Some existing sellers have criticised the policy for putting a strain on the system.

In its early days of operation, about 10 years ago, Ebay suffered frequent computer failures, but it has been more reliable recently.

"This is the certainly the worst for a long time," said Mr Holland. "It will affect people more than 10 years ago, because there are so many people now who depend on selling through Ebay for their livelihood."