Facebook working on video app to take on Snapchat

Facebook headquarters
Harriet Taylor | CNBC

Facebook is going head to head with rival Snapchat in the video-chat app market as the social networking group scrambles to win back users from the popular ephemeral messaging app.

Facebook has been working for several months on the app, known internally as Slingshot, with a simple and speedy user interface, said people familiar with its plans.

Mark Zuckerberg, Facebook's chief, has been overseeing the top-secret project after failing to woo Snapchat's creators Evan Spiegel and Bobby Murphy with a $3 billion takeover offer late last year.

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The app allows users to send short video messages with just a couple of taps of the screen. Slingshot could be launched this month, one person said, while cautioning that Facebook might still decide not to proceed with the product.

Slingshot is likely to stand alone from Facebook Messenger, its popular texting app, as part of Mr Zuckerberg's strategy of unbundling the group's social network into standalone mobile services.

Facebook's first attempt to take on Snapchat directly came in December 2012 with Poke, an app that copied its rival's format of photos and videos that disappear up to 10 seconds after viewing. However, Poke failed to mimic Snapchat's popularity, and Facebook removed it from the App Store this month.

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The latest effort to take on Snapchat comes despite Facebook's subsequent acquisition of WhatsApp Messenger, another popular chat app with more than 500m regular users, for an initial outlay of $14.6 billion in cash and stock, based on Friday's closing price.

Analysts see the fast rise of simple messaging apps, such as WeChat, Line and KakaoTalk, as one of Facebook's biggest competitive threats, especially among younger users, where the social network has admitted it is seeing some signs of declining usage.

"Snapchat over-indexes with the very segment where Facebook has cited falling engagement: teenagers," said Geoff Blaber, mobile analyst at CCS Insight. "The continued introduction of new services, either organically or by acquisition, is essential to maintaining user engagement."

This month Snapchat updated its app to include text messaging and video calling, in addition to the ability to send short videos or photos that "disappear" soon after viewing.

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The app was so popular among teenagers that some American schoolteachers said they had to confiscate students' smartphones to avoid distraction in class.

"In 16 years of teaching I can't think of anything that has ever disrupted my classroom more than today's Snapchat update," tweeted Tracie Schroeder, a Kansas high-school science teacher.

Slingshot takes a different approach. It is said to resemble TapTalk, a new video-messaging app from Berlin-based Wit Dot Media released last month, in which users tap or hold a contact's profile picture to instantly send a photo or short video, which can be viewed only once by the recipient.

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"When you look at how people are using Facebook, it's increasingly as a means of direct person-to-person communication," said Mr Blaber, rather than sharing status updates, photos or videos with all their friends at the same time.

Nonetheless, he said Facebook might again struggle to catch up with Snapchat in the latter's particular style of more casual and intimate messaging.

"When you're coming to market late and trying to compete with what is already a service with a very large user base, it becomes very difficult to close that gap, even for a company like Facebook," Mr Blaber said.