Twitter recently updated its algorithm, changing how users see posts on their feeds. In the same vein, the company also published its fourth-quarter earnings of 2015, revealing that the active user base of the social media platform shrunk down.

The tweaks on the timeline have been a controversial topic ever since the company announced the change, where the hashtag #RIPTwitter quickly made rounds on the Internet in light of it.

However, there are some things about the new algorithm that users of the social media platform have to know. To begin with, it provides an option to simply organize the tweets starting with what Twitter thinks is what the users want to see instead of the traditional reverse chronological order. More to the point, not everyone has to live with it.

"Here's how it works. You flip on the feature in your settings; then when you open Twitter after being away for a while, the Tweets you're most likely to care about will appear at the top of your timeline - still recent and in reverse chronological order. The rest of the Tweets will be displayed right underneath, also in reverse chronological order, as always," Mike Jahr, senior engineering manager of Twitter, says.

Jahr continues to say that Twitter will automatically turn the feature on in the "coming weeks," but he notes that users will still be able to turn it off in settings.

To further explain how it works, it'll prioritize the tweets that seem to be the most important to a certain user. For instance, a virtual reality enthusiast who follows a lot of developers and news reporters of the technology will see a lot more virtual reality-related tweets at the top of their timeline.

Moving forward to the earnings report, Twitter had a $710 million value of revenue and a $90 million net loss in 2015. That's about 90 percent more revenue and 27 percent less net loss in contrast with the profit it generated last year in the same quarter. The company also mentioned that the number of advertisers increased to 130,000, bumping up the figure by 90 percent compared to one year ago.

Financially speaking, all seems well for Twitter, where it even exceeded the expectation of Wall Street. While it does have the same 320 million users as the previous quarter, it actually lost approximately 2 million users. Taking the SMS Fast Followers out of the picture, the figures revealed that the social network's monthly active users declined, going down from 307 million to 305 million.

Jason Abbruzzese of Mashable tweeted a graph of Twitter's user growth.

The social media company is well aware of the situation it's facing, and it has plans to counteract this downward trend.

"We are going to fix the broken windows and confusing parts, like the .@name syntax and @reply rules, that we know inhibit usage and drive people away," Twitter said in its investor letter.

So why is Twitter implementing the new algorithm? As mentioned earlier, the company's user base is declining, where it's facing pressure from investors to boost that figure. Simply put, this is one of the efforts that Twitter is making to have more people use the social media platform.

It's worth noting that one of the biggest investments that the company plans to make is in Periscope, Twitter CEO Jack Dorsey said during an earnings call via the live video streaming app. It didn't exactly go well, though, as the broadcast was upside down for some users.

With that said, Twitter is still determined to become the world's largest social network, saying that it'll continue to work on building the biggest "connected audience."

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