This review is concerned with the various theoretical approaches to the problem of е$^+$е$^-$ annihilation into hadrons in the light of the new experimental data obtained in 1973-4. Discussions are given of the behavior of the total cross section for е$^+$е$^-$ annihilation into hadrons, the form of the inclusive spectra, the dependence of the particle form factors in the timelike region on the square of the momentum transfer, and the effect of the process of е$^+$е$^-$ annihilation into hadrons on scattering by positrons and on the process е$^+$е$^-\to\mu^+\mu^-$. Other topics considered include the relation between inclusive annihilation and electroproduction, as well as a number of theoretical models: the parton model, the statistical model, etc.