After sellers investing in the information technology to the market, the buyers' search cost decreases, and the profit of buyer declines. The sellers who invest more in information technology as to make the search cost reduced more can expand the market share and take an advantageous competition. All these are based on the analysis of using Hotelling spatial differentiation model and the equilibrium theory of the game theory, and on the assumption that there is no collusion and monopoly between sellers. The strategy of the sellers is analyzed subsequently．Reducing search cost would increase the buyers’and the social welfare．W e argue that when the buyers search cost reduce to zero，the market would be in the best of equilibrium competition．which can be described as marginal cost equal to market price-buyers appropriate aU the surplus and sellers have zero profit．In the end，the productivity paradox of information technology is analyzed and interpreted with our mode1．