Yahoo buyer service overwhelmed on big shopper day

SAN FRANCISCO (Reuters) - Yahoo Inc's payment processing system is suffering periodic outages on Monday that prevent some consumers from completing shopping transactions, according to a company Web site for merchants.

The Sunnyvale, California-based company reported some of the merchants who rely on Yahoo's e-commerce checkout system were reporting error messages among consumers completing the checkout process while shopping online.

"Some merchants are reporting that shoppers are receiving an error message indicating "system unavailable" during the checkout process," according to Yahoo's Store System status page posted at 8:31 a.m. (16:31 GMT).

The cause remained under investigation at noon local time.

Yahoo shares tumbled 3.5 percent to $25.22, closing down 91 cents on the day on Nasdaq. The stock traded heavily after a report on CNBC television highlighted the Yahoo merchant outages and its potential impact on a key online shopping day.

The first Monday after Thanksgiving is considered "Cyber Monday," the kickoff of the online shopping season as consumers return to work and go online to check for deals not found in shopping malls and other brick and mortar retailers.

"We are continuing to investigate this issue at this time. Further updates will be provided as they become available," the status report site for Yahoo-affiliated merchants said.

Yahoo spokeswoman Diana Wong said the company's merchant services appeared to be straining to keep up with heavy holiday shopping traffic.

"We are minutes away from getting everything back up," Wong told Reuters at 12:30 p.m. PST (2030 GMT), more than four hours after the company noted the periodic disruptions in merchant transaction services.

Updates for merchants can be found here