Facebook (NASDAQ:FB) is apparently planning on releasing yet another app. The rumored "Moments" app is designed for private sharing of content -- a feature that is hidden in the depths of Facebook's flagship platform. The feature finds some middle ground between Google Plus' Circles and Snapchat's private sharing capabilities.

One person who's seen Moments says it might look similar to Cluster, pictured above. Source: Cluster.

TechCrunch reported that a person who had seen the app likened Moments to Cluster, a mobile app that creates "spaces" for small groups to share content privately.

Private sharing is a major area of interest for Facebook. It makes sense, too. If people can easily share things privately, they're apt to share more things. That's one reason Snapchat has been such a success. 

Since Snapchat turned down Facebook's $3 billion buyout offer last fall, the social media giant has been on a mission to enter the market. It released Slingshot, which has become a near-clone of Snapchat after ditching its pay-to-play mechanism. Facebook's Instagram released Bolt, which cleverly streamlines private photo sharing into a single button. Moments is another attempt at private sharing, and might be Facebook's best product in the category yet, but it's still a far cry from Snapchat.

Unbundling vs. new products
I've written previously about Facebook's unbundling strategy, which takes features such as Messenger from its flagship platform and puts them in a stand-alone app. It did this earlier this year with Paper, which presents the top stories from a user's Newsfeed in a more stylish and usable interface than the flagship app. Paper hasn't exactly caught on, but that doesn't make it a failure. Facebook says those who have downloaded the app use it a lot.

Recently, Instagram introduced Hyperlapse, an app that shoots time-lapse videos. This feature could have been bundled in Instagram, but it works better as a separate app. I would also consider it part of the unbundling strategy.

Unbundling capitalizes on the ubiquity of Facebook, giving the new apps a built-in network and instant utility. This is a huge advantage that allows Facebook to come late to the game in some categories and still succeed, most notably with Messenger, which has over 200 million users. To that end, Moments -- if it is released -- will be able to capitalize on Facebook's existing network. 

With apps like Slingshot or Bolt, however, Facebook doesn't have the advantage of 1.3 billion people on its network. Networks need to be built from scratch, and Facebook is playing a big game of catch-up. Snapchat reportedly has over 100 million users, and it is growing rapidly as the network effect takes off. 

Doing Snapchat better than Snapchat?

Snapchat. Image source: Maurizio Pesce.

Snapchat is very good at what it does. Similar to the way it once perceived Instagram, Facebook might see Snapchat as a threat because it offers a unique platform for sharing pictures on mobile devices. This is an area of huge importance to Facebook.

Facebook solved the Instagram problem by buying the company, which turned out to be a great investment. Buying Snapchat for $3 billion would have been another excellent investment. Snapchat's most recent round of funding valued the company at $10 billion, and its user base has more than tripled since Facebook's offer less than a year ago.

Now, Facebook is in a position of trying to do Snapchat better than Snapchat. But instead of rethinking the sharing mechanism that Snapchat invented, it's simply copying it with Slingshot and Bolt. With Moments, Facebook might be moving closer to competing with Snapchat for private sharing, as it capitalizes on Facebook's biggest strength -- its network.

An uphill battle
Whether Facebook actually releases Moments remains to be seen, and if it catches on is another thing entirely. There's already strong demand for private sharing, but it's not clear there's strong demand for private sharing on Facebook. Only a handful of users (in Facebook terms) use its friend lists -- the feature Moments unbundles. It's quite possible, however, that unbundling the feature will draw more attention to it and increase its use. That's part of the goal in Facebook's unbundling strategy.

What's more, many users don't trust Facebook when it comes to private activities. A survey last fall found that half of people who leave Facebook do so over privacy concerns.

In order to capture the market Snapchat is dominating, Facebook must revamp its image, reimagine private sharing, and build a new network in the face of established competition. It's a tough task, bordering on impossible.

But if Moments does catch on, and Facebook is able to increase the amount of private group sharing on its platform, it's a huge win in the battle. As mentioned, private sharing will compel users to share more content. Additionally, content shared in smaller groups is likely more engaging for those it's shared with because the curator is sharing it with specific people in mind. All this adds up to people spending more time on their Newsfeeds, which means more advertising opportunities for Facebook.

Adam Levy has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (A shares), and Google (C shares). The Motley Fool owns shares of Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.