The Internet is a tool for people to record, release, to search or accept and exchange information. It can be understood as an information recording and transmission tool. The main factor of the Internet is to process information on a large scale with high speed and low cost. Therefore, any market failure caused by the inconvenient information processing will be improved by the development of the Internet technology. The improvement of the Internet to the market mainly manifests in three aspects. Firstly, the development of the Internet helps to alleviate the inadequacy and asymmetry of the market and reduce transaction costs. Specifically, the Internet improves the efficiency of matching supply and demand in the heterogeneous market (e.g. the decrease of the non-load probability and cost based on the Internet technology and the reduced frictional unemployment in the labor market), promotes the upgrading of consumer goods and life-oriented services, alleviates the excessive regulation phenomenon that cobweb type commodity may appear and eases the loan difficulties of small and medium-sized enterprises. Secondly, the Internet can improve the supply efficiency of public goods and commonwealth goods. The Internet helps the government correct deviations in technology and promotes democratic decision-making in municipal constructions. Thirdly, the Internet popularizes high quality education to purify the academic thought market. The ability of the Internet to disseminate information on a large scale enables the adoption of technical means, such as the Mooc and the duplicate checking. Therefore, it promotes the popularization of high-quality education and reduces the probability of plagiarism and copying. Meanwhile, the Internet disrupts the market in the following ways. It may result in a monopoly of information supplier, such as the oligopoly competition pattern of different products in the information service market. It also may widen the gap between the rich and the poor in different industries. If there is incremental capital-intensive technological progress in many sectors of an economy, there will be a polarization of income distribution and wealth distribution in the society, and this polarization is likely to be passed on from generation to generation. The Internet may stimulate the flood of false information, cause information explosion, stimulate bad commodity trade, etc. As a major technological progress in information recording and transmission, the Internet is not only helpful in improving the operation of the market in terms of information recording and transmission, and reducing the market failure caused by information problems, but some unscrupulous people will also use this technology to disrupt the market and cause some new market failures. The specific expression of market failure in the real market is highly related to the technical conditions. The Internet technology will change the specific expression of market failure and cause certain changes in the scope and pattern of government regulation of the market. Based on this, the government should carry forward the advantages of the Internet to perfect the market mechanism, enhance the ability of the government to regulate and manage the market, and further improve social welfare. At the same time, the government should effectively regulate some unscrupulous people who use the Internet technology to disrupt the market.