Ancelotti’s team wasted a golden opportunity to win at Anfield for the first time since 1999 as 18-year-old Curtis Jones fired Liverpool to a 1-0 win in the third round on Sunday.
Liverpool-born Jones, 18, is a graduate of Liverpool’s youth academy and he was joined by four other raw rookies in Jurgen Klopp’s line-up.
Klopp made nine changes, fielding a starting line-up which cost £43.9 million, while Everton’s team cost in the region of £222 million.
Ancelotti had sent out a virtually full-strength team, but they wasted a host of chances in the first half before surrendering limply after the break.
Everton are without a win against Liverpool since 2010, making this a bitter first taste of the Merseyside derby for former Napoli boss Ancelotti, who is ready to discuss the tame display with his players.
“I am not used to speaking to the players after the game but I am going to speak to them about this,” Ancelotti said.
“I think in the second half we were not able to keep the right ideas on the pitch as we did in the first half, when we had the opportunity to score.
“The fact we didn’t score in the first half affected the performance in the second half, which was not good enough.”
It was suggested to Ancelotti that Everton had a mental block when it came to games at Anfield, but he said it was a matter of losing intensity in the second half.
“The line-up of Liverpool didn’t affect our idea. It was to play a good game. We knew Liverpool would put fresh players in and the intensity could be high,” Ancelotti said.
“The defeat arrived because we were not able to keep a high intensity in the second. We lost energy and confidence.”
After a performance which former Liverpool defender Jamie Carragher described as the worst derby display at Anfield in 35 years, the difficult situation Ancelotti has inherited was laid bare.
“We are going to speak all together and find a solution to try to improve the team,” Ancelotti said of potential moves in the transfer window.
Meanwhile, Klopp was delighted as his decision to rest the majority of his injury-hit squad paid rich dividends.
The runaway Premier League leaders look well set for the future judging by the youngsters’ vibrant effort and Klopp said: “I saw a sensationally good performance from a not-very-experienced team.
“A lot players for the first time playing on this stage in front of this crowd and this type of opponent. It was outstanding. I loved each second of the game.”
Taking a swipe at pundits who said his selection disrespected the Cup, Klopp added: “We never take the cup for granted.
“I would love to see a few people and ask them what they thought about the line-up, and all these bad things about me and the FA Cup and no respect.”