Internet phone service provider Skype said yesterday that users continued to face problems logging on to the service and it is struggling to fix the problem which first emerged on Thursday.

In a statement on its website at 2pm yesterday, Skype, owned by internet auction site eBay, said it expected the problem to be resolved in 12 to 24 hours.

The company said the problem was linked to an issue with its own software and reassured users that its site had not crashed or been attacked by hackers.

"We love our customers too much to let that happen," Skype executive Villu Arak said in a blog posting.

Skype did not say how many of its users were affected, and could not immediately be reached for comment.

Skype has more than 220 million users, including many business customers, who use its software to make cheap or free phone calls that are routed over the internet.

The company provides its software for free but customers have to purchase credit to make calls to landlines or mobile phones. Calls to other Skype users' computers are free.

In September 2005 eBay purchased Skype for an initial payment of $2.6 billion (€1.9 billion) in stock and shares, with up to $1.5 billion more to be paid if the company meets certain performance targets over the next three years.

Another posting on Skype's "Heartbeat Blog" said the company was "seeing signs of improvement in our sign-on performance" but that it was too early to say if the problem was close to being fixed.

eBay employs more than 800 people in Ireland at a customer support centre in Blanchardstown, Co Dublin.

The centre includes staff at the international headquarters of another of its subsidiaries, PayPal.

The outage weighed on eBay's share price in New York on Thursday when it closed down 2.58 per cent despite a late rally of Nasdaq stocks.

Shares rose again yesterday, along with a generally positive market. - (Additional reporting: Reuters)