Everybody loves a train wreck and what I affectionately call a “NASCAR story.”

Even the promise of a collision tends to attract a crowd.

With this as the backdrop, UTStarcom faced a quandary.

The Justice Department had nailed the company for violations of the Foreign Corrupt Practices Act, a fancy phrase for bribery. How does one put its best foot forward in disseminating such news?

Ultimately, the company went with the old “If a tree falls in a forest and no one is around to hear it, did it make a noise?” strategy. By distributing the news release on December 31, the company calculated that reporters would have one foot out the door in anticipation of their New Year’s Eve celebrations.

I think it’s fair to say the new release’s headline UTStarcom Inc. Agrees to Pay $1.5 Million Penalty for Acts of Foreign Bribery in China - compliments of a writer at the Justice Department - made this tough to miss.

As it turns out, reporters were willing to stay for a few extra minutes before New Year’s Eve, as you can see from a sampling of headlines:

San Francisco Chronicle: UTStarcom settles bribery case for $3 million (Dec. 31, 2009

PC World: UTStarcom to Pay U.S. Fines for Bribing Chinese Carriers (Dec. 31, 2009)

The Associated Press: UTStarcom pays $3M to settle bribery charges (Dec. 31, 2009)

The Wall Street Journal: UTStarcom to Pay Fine for China Bribery (Dec. 31, 2009)

The New York Times: Telecom Company to Pay $3 Million in China Bribe Case (Jan. 1, 2010)

I got a kick out of The New York Times piece that highlights, “A company spokesman could not be reached for comment on Thursday.” Apparently, The Times held out a day waiting for a return call, which explains the January 1 publication date.

Still, if you’re UTStarcom, you might make the case that most of the media coverage was nothing more than a regurgitation of the news release. With the worst behind, let’s now embark on a fresh start in 2010.

But this rationale would be flawed.

Trying to hide bad news by distributing an announcement on a late Friday afternoon or on December 31 is akin to flashing a red cape in front of a bull. It’s only going to increase the media’s “enthusiasm” to explore the story with greater depth.

Plus, the story has a Tyco-like quality to show excess or just plain buffoonery (although we can safely assume no $2M birthday parties were staged in Sardinia). Consider that the Justice Department documentation already shows ditties like the company paying for Chinese officials to take junkets to Hawaii, Las Vegas and New York under the auspices of training.

It’s not like this is the first time the company has lost its way.

The law journal The Recorder published a piece entitled “UTStarcom’s Crash Shows Pitfalls of Doing Business in China” back in 2007 that captured:

Over the past couple of years, the company has admitted to backdating stock options for executives, investigated its own employees for paying bribes across Asia, and admitted improperly recording hundreds of millions in revenue.

Ouch.

And there’s still more fodder to explore.

For example, it’s not every company that asks its general counsel to do double duty as chief ethics officer, but that’s the dual title worn by Susan Marsch. I’m guessing Ms. Marsch had a few voicemails when she returned from the holiday break.

The company might also want to rethink the “Our Values” section on its Web site:

That line “clear standards of right and wrong” could use some work. Perhaps that Justice Department copywriter is available.

Kidding aside, this story has all the elements of a country song.

It behooves UTStarcom to recognize that a) the story won’t disappear behind a December 31 release date, and b) without proper preparation, its public image will be savaged beyond rehabilitation.

The vast majority of my posts address topics outside the confines of the Agency.

My last company-centric post was back in July, taking a trip down nostalgia lane with our 21-year anniversary in mind.

With the caveat out of the way, I wanted to highlight a guest post from Wei Wang out of our Beijing office.

The piece, titled “Don’t Assume China Mimics US-Style Social Media,” appeared on the blue-chip property ReadWriteWeb yesterday.

While I wouldn’t call it classic storytelling - there’s no protagonist, obstacle or happy ending - the social media scene in China is brought to life with anecdotes and personal experiences.

I particularly liked the fortune-telling anecdote which “jars Western sensibilities.”

It’s worth noting that our head of Editorial Services, Bonnie Lamb, edited the work from Wei (who was writing in her second language) and RWW’s Andrew Lobo tightened the piece into its final form.

Here’s the RWW guest post:

China enjoyed center stage this week thanks to President Obama’s visit. Naturally, trade relations were on the agenda.

For Internet companies sitting in the US, news reports that chronicled the President’s every move in China provide a visible reminder of the business opportunity that can seem a click away.

So, why not export social media to China just like KFC and American Idol? After all, seeing Yao Ming, arguably China’s grandest international star, on Facebook and Twitter, one naturally figures that, aside from the language and periodic blocking of websites, “What’s the diff?”

With Facebook gaining little traction in China (having only 390,000 users), and tweets virtually grinding to a halt since the government started blocking Twitter, these things point to the “diff.”

Simply flinging an American product into the Chinese market won’t succeed, because every social media category has a Chinese equivalent that is tuned to the specific needs of the mainland Chinese market.

Take one of China’s “Facebooks,” Kaixin001.com, which already has secured over 40 million users since launching only last year. The platform gained its initial popularity through applications that you would recognize from Facebook, such as “Friends for sale” and “Parking wars” - but with a Chinese twist.

Take, for example, the application called “Xingming Yuanfen,” in which you can type in a friend’s name and test your “yuanfen” (i.e. your predetermined relationship with that person). Another application explains who you were in your previous life. It turns out I was a bandit, much to the chagrin of my parents.

These “fortune-telling” applications enjoy incredible popularity on computers and mobile phones. While fortune-telling jars Western sensibilities, it remains a part of Chinese culture.

But the best example of China walking to the beat of its own drummer is the continued popularity of the BBS.

That’s not a typo.

That is the same bulletin board system that went by the wayside in the US with dial-up modems and US Robotics. Chinese students - who, like their counterparts in the US, are more open to experimentation than other segments - established the foundation for the BBS to flourish in China.

All major universities operate their own BBS. Peking University and Tsinghua University (which are the Harvard and MIT of China) host the Weiming BBS (named after Weiming Lake at Peking University) and Shuimu Tsinghua BBS, respectively.

With 10+ years’ worth of graduates who grew up on the BBS now driving the Chinese Internet market, these same people have fueled a range of BBS sites tied to their interests and professions. According to the latest CINIC (China Internet Network Information Center) report, roughly 30% of Chinese Web users spend a significant amount of time on a BBS. So, these sites certainly transcend geekdom.

55BBS, for example, is an online community where users share discount information, coupons and other creative ways of landing a good deal. Users also show off what they got from their latest shopping spree, showing off a photo of a skin care product as if it were a trophy.

Perhaps the most unique phenomenon in China is Tianya, the #1 BBS, with almost 30 million users.

What is Tianya? Think of it as a gathering place for an eclectic blend of intellectuals, journalists, freelancers, professors, researchers, gadflies, etc. Users write on and comment about sensitive social issues that may be off-limits to mainstream media. People also head to this forum to gossip about celebrities (okay, some things don’t change between cultures).

A Chinese word has been coined for BBS evangelists: “Da’rens,” which roughly means “people who really know how to do something.” We’re now starting to see some “Da’rens” parlay their popularity into commercial success. The famous makeup Da’ren known as Arora started out writing about cosmetics on a BBS before launching a blog for the mega-portal Sina.com.

From a Chinese perspective, the fundamental difference between a blog and BBS is that a BBS allows for anonymity, which appeals to the introversion of many Chinese. Blogging is also more of a solitary activity, with readers chiming in with comments later. The BBS, on the other hand, is more of a collaborative undertaking, which again appeals to the Chinese.

This all means that Internet companies from the US looking to crack the mainland Chinese market need to do their homework and tailor their products accordingly.

Here’s an easy litmus test when planning your market entry in China: “What’s the difference between the US and Chinese version of your product?”

If the answer takes more than 60 seconds to explain, then you’ve got a fighting chance.

Boy meets girl.

David topples Goliath.

Money.

Overcoming hardships.

Goliath meets girl.

All the basic themes of classic storytelling work in any culture and in any language.

But this doesn’t mean you can develop stories in your home market, fling them over the fence to far-reaching countries and expect them to resonate with the local media.

Regardless of the theme, you still need local characters for a story to play in a “Peoria” like China.

Look at the story last week in the Journal “Scouring China’s Streets for Car Design Ideas” that examines Mercedes-Benz’s decision to focus on China for inspiration in building tomorrow’s cars for the global market, not just China.

First and foremost, you have a local protagonist in Olivier Boulay, who heads up the Mercedes design studio in Beijing.

A killer anecdote sets the tone for the story:

A decade ago, in search of inspiration for an ultra-luxurious Mercedes-Benz, designer Olivier Boulay studied Japan’s chauffeur-car culture.

Now, as he dreams about the future of the automobile, he zips around Beijing on a $367 electric bike, along with throngs of the city’s residents.

Nice touch that Boulay shared the receipt of his motorbike with the reporter.

The story goes on to weave in China-centric stats like how China now represents Mercedes’ fourth largest market compared with 10th place back in 2006.

But the most revealing data lies in a bar chart that shows Mercedes now sells more cars in China than in Japan (although it’s strange that the same bar chart didn’t appear in the online version of the story; perhaps a shortage of bytes on this day).

Accentuating the point, we learn that Boulay spent 17 years in the Mercedes design studio in Japan before making the jump to China.

Step back for a moment and consider the head of Mercedes Japan. Do you think he or she was thrilled about this story? What about the Mercedes employees based in Japan?

But without this context, you don’t generate the drama that shapes the story.

The communicators looking after the Mercedes global brand recognize this point and obviously had the clout to advance this one-voice story (would be interesting to know if the Mercedes communicators had to navigate internal politics to free up the story).

Playing a bit to the nationalist tendencies in any country, Boulay shares:

“You can see how a new generation of consumers in this country is way out in front.”

Also worth highlighting, you don’t need hard news to generate these types of stories. The closest the Mercedes story comes to a news hook is noting that “Boulay moved to Beijing this year.” Not exactly a stop-the-presses moment.

All in all, it’s a great example of localizing storytelling.