I found Terranova's chapter on free labor compelling, distressing, and a bit out of date in regard to developments in Internet infrastructure post-publication: "Free labor is the moment where [the] knowledgeable consumption of culture is translated into excess productive activities that are pleasurably embraced and at the same time often shamelessly exploited." (78) I think Terranova understands those activities as largely textual engagement in communities over a smooth network space. However, as bandwidth has increased and with the birth of the mobile internet, it's probable that the majority of activity online today is concerned with media objects (photos, video) shared on connected but discrete proprietary platforms (Facebook, tumblr). This advances several of the implications that she has identified.
First, there are the increasing success of the commodification of content on the internet. In addition to ubiquitous advertising on content platforms, more traditionally structured business models from iTunes to the New York Times paywall have emerged, but it is also about charging for _production_, whether charging for the cost of the hardware (eg, iPhone camera) to the premium accounts necessary to host the content (Vimeo).
Additionally, Instagrams are likely something less than the 'knowledge work' she discusses, but are certainly "involved in defining and fixing cultural and artistic standards, fashions, tastes, consumer norms, and, more strategically, public opinion," (82) and really, the "curation" mode of tumblr is nearly an ideal instantiation of consumption-production activity where the provenance of the image is nearly irrelevant but the association with individuals' streams is desired.
Unfortunately, as the dynamics of YouTube has definitively shown, her differentiation of online activity from the "people shows" of TV was premature. I think that her brutal assessment of television fully applies to much of the activity on the internet that is less about "self-fashioning" and more about desperately generating social capital: "those who do not produce marketable style, who are not qualified enough to enter the fast world of the knowledge economy, are converted into monetary value through their capacity to _affectively_ perform their misery." (95) In this case, however, I think the "qualified" individuals are not those that generate any knowledge per se at all, but those that develop and run the platforms. Facebook can be easily understood as affective performance which is all but compulsory. And because Facebook is a closed, proprietary platform (with its own 'cloud'), the production-consumption of the masses generates value not only through advertising itself, but through the generation of a commodity Terranova doesn't develop enough -- data. The quantization of behavior increasingly has material value, as it enables the capitalist entity to shape the activity of the population to whatever revenue-producing model in which it has stake. I think all of this both validates Terranova's intuition of the Internet pre 2004 and also points to the maturing / degrading milieu in which we are currently operating.