Lilly, who described himself in an internal e-mail to staff as "always a startup guy at heart," will join venture firm Greylock Partners.
Mozilla's flagship product, the Firefox browser, is used by more than 360 million people around the world, with an estimated global market share of 24 percent, according to the Mozilla website.
"Venture investing is what I've wanted to do for quite a long time -- I've been involved in many startups, even building an incubator a decade ago, and have interests that span enterprise, open source, and the broader web, among others," wrote Lilly on his own blog. "I'm incredibly excited to join an amazing team there -- it's a firm that I've noted to be incredibly strongly oriented towards entrepreneurs -- it really matches my sensibilities as an operator extremely well."
Greylock Partners issued a written statement from Reid Hoffman, a partner at Greylock and co-founder and Executive Chairman of LinkedIn: "We are excited to have John Lilly join us at Greylock. John and I have worked together at Mozilla. As CEO, John led Mozilla from 20 million to nearly 400 million users. His experience as a founder, operating executive, and board member will be a great resource to entrepreneurs. John also has an excellent background in open source, enterprise, consumer internet software -- the areas of Greylock investments like Redhat, Workday, LinkedIn and Facebook."
Lilly joined Mozilla in July 2005 as CTO and was named CEO in January 2008. Prior to joining Mozilla, he was the CEO and founder of Reactivity, at its outset in 1998 a technology incubator. By 2001, Reactivity had transformed itself into an application network services provider for enterprise customers, with Lilly holding the post of CTO until December 2004. Cisco Systems acquired Reactivity in a deal completed in March 2007.
The Mozilla Foundation announced Lilly's move as part of a "more open" CEO transition, according to Mitchell Baker, chair of the Mozilla Foundation. "The timing of this announcement -- just as we begin a formal search for a new CEO -- is to make this process more open than is generally the case and is a reflection of the uniqueness of Mozilla as a public benefit organization dedicated to openness and participation in Internet life," wrote Baker on his blog.
In a Webcast conducted on Monday, Mozilla's director of Firefox, Mike Beltzner discussed the development roadmap for Firefox 4, scheduled for release before the end of the year. It is the next major version of the organization's open-source browser.
In November 2009, Mozilla reported fiscal year 2008 revenues of $78.6 million, mostly generated from an arrangement with Google in which the search company pays Mozilla for Firefox-initiated traffic in a deal that concludes in November 2011.