While Snapchat's 150 million daily users are a mere drop in the bucket to Facebook's 1.8 billion users, Snapchat has something that Facebook has reason to be afraid of: momentum.
Snapchat was Apple's most downloaded app of 2016 in the App Store, and its parent company Snap Inc. is preparing for a $25 billion IPO early next year.
Snap has branched into selling hardware with its hyped Spectacles camera glasses launch, and it has already built multi-year partnerships with brands like Turner and Disney to create original shows for the Discover section of its app (which is another strategy Facebook is starting to adopt, too).
While Facebook has become an essential utility for connecting people, Snapchat has popularized a new way of communicating that's highly visual, ephemeral, and fun. Snapchat represents an existential threat to Facebook because it has managed to redefine how people share through photos and videos.
And so, Facebook spent 2016 acknowledging that Snapchat's visual way of communicating is the future of social networking. In 2017, Facebook will likely try to prove that it can beat Snapchat at its own game.